National basic income would cost $76-billion a year: budget watchdog

[mentalfloss]

National basic income would cost $76-billion a year: budget watchdog

Federal coffers would have to dole out more than $76-billion a year to provide every low-income household with a guaranteed minimum income if the government ever embarked on such a radical overhaul of the social safety net, Parliament’s budget watchdog said Tuesday.

In a new report, the parliamentary budget officer estimated the federal government would have to find about $43.1-billion to cover the full cost of the program to top up the $32.9-billion Ottawa already spends on support to low-income Canadians.

A guaranteed minimum income often means different things to different people, but at its core it can be described as a no-strings-attached benefit that governments provide to citizens instead of various targeted social benefits. It can be delivered as a universal payment, or as a means-tested benefit that declines in value as incomes rise.

Spending $76-billion would affect more than 7.5 million people, who would receive on average $9,421 a year, with the maximum amount reaching $16,989 for individuals and $24,027 for couples, before deductions for any income earned.

A government determined to institute the idea would have to decide what benefit programs to replace, the value of the benefit itself, and how to address some of the non-financial factors that affect poverty, said Mostafa Askari, the deputy parliamentary budget officer.

“If politicians were to implement this, then they would have to really decide about the structure of this program,” he said.

The federal Liberals have been lukewarm to the idea at a national level, arguing the Canada Child Benefit, among other measures, amounts to a guaranteed minimum income.

A recurring theme in the government’s work on a poverty reduction strategy has been the need to modernize the social safety net and the 61 federal income support programs involving eight departments.

The Liberals are unlikely to trade those programs for a basic income that, given equally to working age Canadians and seniors could leave the latter group with less money than they get now, said David Macdonald, a senior economist at the Canadian Centre for Policy Alternatives.

“There is a temptation to just clear away the table and re-setup your own basic income that treats everyone the same across the board, but the danger in doing that is you end up with losers,” Macdonald said.

Macdonald, who has studied basic incomes, said the concept isn’t a silver bullet to poverty eradication, but it can be part of the solution.

Ontario is testing the idea and federal officials are keeping on a eye on the pilot project, the parameters of which formed the basis for the budget officer’s report released Tuesday.

Hugh Segal, a former senator who helped design the Ontario pilot, said the numbers in the budget officer’s report suggest a federal program wouldn’t break the bank.

The cost of a basic income system is a key concern from critics, as is worry that the money would act as a disincentive to work.

Conservative finance critic Pierre Poilievre, who requested the budget estimates, tweeted that the report doesn’t eliminate that concern: “The welfare state apparatus remains & the financial penalties for working grow – the opposite of what basic income was supposed to do.”

Segal, a former Conservative senator, said a basic income should receive all-party support if the Ontario test yields positive work outcomes and helps reduce government spending on health care, even from Tories who believe “people should get a step up and not a hand out.”

“A step up is a base that then encourages them to work,” Segal said.

“That’s what this is designed to do.”

https://www.theglobeandmail.com/pol...would-cost-76-billion-a-year-budget-watchdog/

 

[Tecumsehsbones]

it's coming.

Well, either that or Soylent Green.

 

[Danbones]

Ummm..is basic income more or Less then what the government takes?

I have a funny feeling it won't be more...

It never is in communist and nazi globalisms.

Next thing you know there will be a retroactive one child policy because budgets balance themselves.

 

[Twin_Moose]

What I've been reading on this that it is to take the place of other social payments like welfare and child benefits taking the total cost down to $ 46 Billion. My question is how many mothers with welfare babies will want to take a cut in pay?

 

[mentalfloss]

Andrew Coyne: Three points on the GST, to end poverty? Guaranteed income sounds like a good deal

One feature of the debate about the idea of a guaranteed annual income — minimum income, basic income, call it what you will — is wide disagreement about what it means, even amongst its supporters.

How high or low would the maximum benefit, paid to those with no other income, be? How sharply or gradually would it be clawed back as earned income rises? Would everyone receive the same universal “demogrant,” to be taxed like other income, or would the amount of the benefit vary with income, as in the “negative income tax” model? And, perhaps most contentious, what existing programs would it replace?

The intersection of these four variables can produce wildly varying cost estimates. A high maximum benefit combined with a low clawback rate will cost a good deal more than a low-maximum, high-clawback mix, while gross outlays under a demogrant will be much higher than under a NIT, even if their net hit to the budget is the same.

Last, the offsetting savings from eliminating other programs can differ by orders of magnitude, depending on the proposal: some basic income models envisage it replacing only certain forms of social assistance, while in others it would subsume much of the current welfare state.

In the absence of consensus on each, the way has been clear for critics to produce some truly eye-popping estimates, ranging into the hundreds of billions of dollars, leading many to discredit the whole idea as impracticable at best, utopian at worst.

So the Parliamentary Budget Office has done us all a service by its recent attempt to estimate the cost of a basic income guarantee, if implemented nationwide, based on the most advanced proposal made to date in this country: Ontario’s Basic Income Pilot, a negative income tax-style program currently being tested in three communities in the province.

That might seem an answer to a question that hasn’t been asked (except by Conservative MP Pierre Poilievre, who requested the study). Ontario hasn’t even decided whether to implement it yet — who said anything about a national program?

But never mind. The results, speculative as they are, are intriguing. The PBO puts the cost of a nationwide rollout of the Ontario program, guaranteeing every adult of working age a minimum of $16,989 annually ($24,027 for couples), less 50 per cent of earned income — there’d also be a supplement of up to $6,000 for those with a disability — at $76.0 billion.

Even that number, eye-watering as it is (the entire federal budget, for reference, is $312 billion), is a long way from the $500 billion estimates bandied about in some quarters.

But that’s just the gross figure. The PBO estimates the cost of current federal support programs for people on low-income (not counting children and the elderly, who already have their own guaranteed income programs) at $33 billion annually. Assuming a federal basic income replaced these leaves a net cost of $43 billion. That’s still a lot — one seventh of current federal spending.

But that, too, is most probably a considerable over-estimate. The feds would be highly unlikely to introduce such a program on their own, in a field dominated by the provinces. Neither would a purely federal basic income achieve nearly as much as if the provinces could also be persuaded to roll their own programs into it.

As the PBO observes, a basic income “could take the form of a combined federal-provincial basic income system managed by an intergovernmental fiscal arrangement. This would replace some provincial transfers for low-income individuals and families, including many non-refundable and refundable tax credits, thereby reducing its net cost.”

Again, which of these programs to include would be a matter of some debate. But suppose we stick with the Ontario model. If implemented, it would replace Ontario Works (social assistance) and the Ontario Disability Support Program. The total savings: about $8 billion. Supposing equivalent savings were achieved in the other provinces — and federal transfers reduced accordingly — that would knock about $20 billion off the national pricetag.

So we are looking at a net cost, based on this model, of something on the order of $23 billion: roughly one per cent of GDP, or about three additional points on the federal GST. What would that buy? The income guarantee in the Ontario Basic Income Pilot, the province notes, is set at 75 per cent of Statistics Canada’s Low Income Measure; combined with “other broadly available tax credits and benefits,” it would be enough to pay for basic household needs. Indeed, it is not far off the low income thresholds defined by StatsCan’s Market Basket Measure. Three points on the GST, to end poverty. I can’t think of a better way to spend public funds.

Andrew Coyne: Three points on the GST, to end poverty? Guaranteed income sounds like a good deal | National Post

 

[Twin_Moose]

Finland Will End Its Experiment With Universal Basic Income After a Two-Year Trial

Finland has decided not to extend its trial in universal basic income, the first welfare experiment of its kind by a European government that gave citizens an unconditional monthly payment. The government rejected a request from Kela, the country’s social security agency, for additional funding to expand the innovative two-year pilot program, meaning it will come to an end in January 2019, the Guardian reports.
The program, which Finland inaugurated in January 2017, saw 2,000 jobless people receive €560 ($685) per month without requiring them to work or seek employment. Recipients who found a job continued to receive the payments. In 2015,

Finland’s unemployment rate had hit a 17-year high of 10%, prompting calls for welfare reform.
But in December 2017, the Finnish parliament introduced legislation requiring jobless people to work at least 18 hours every three months to qualify for unemployment benefits, signaling that the welfare regime could be shifting in the opposite direction. Advocates of universal basic income (UBI) programs, which have become more popular in recent years, argue that guaranteeing a baseline pay for adult citizens can help alleviate social issues like crime, poverty and chronic unemployment. But critics contend that UBI programs are costly and ineffective. Other countries including Holland, Canada, and Kenya have also experimented with basic income schemes.

 

[Danbones]

eta
Haha TM, you beat me to it, but I like the repetition for emphasis factor.


Finland's basic income trial falls flat

it will not be extended after this year, as the government is now examining other schemes for reforming the Finnish social security system.
Finland's basic income trial falls flat - BBC News

It's a complete and total failure in real life, of course MF would endorse it!

Not to mention the fun of squeezing some BMP.